Happy Birthday Devon! Yesterday the S&P started the week with a slight decline and traded in a very tight range, despite 8/11 sectors higher as Tech came under fire. News that China memory developer CXMT made substantial technical breakthroughs, along with comments from AVGO CEO comments on AI investors “gambling” with little understanding of what they’re betting on”, were key contributors to the weakness. The DRAM ETF fell 4% and NYSE Semis index almost 3%. Oil continued to climb, with Dec Brent approaching $108 but Treasury yields were largely flat.

The S&P 500 opened modestly lower with global tech continuing to come under pressure and Q3 earnings season kicking off on my daughter's birthday. Hostilities in the Middle East continued. Iran is reportedly preparing for renewed conflict and US strikes, while the Houthis warned that employees and civilians around Saudi Aramco’s oil facilities are legitimate targets if they remain. Questions around last week’s Russian diesel “agreement” and energy “ceasefire” remain, especially after both sides continued to attack each other. However, the start of earnings news flow could push aside the geopolitical macro topics and refocus markets on corporate fundamentals and business commentary. The S&P 500 is trading in another pretty tight range today and slightly in the red, right around 7800. The equal-weight is lagging a little and smaller caps are underperforming.

Healthcare and Industrials are the lagging sectors today. Comm Services and Energy are leading. The treasury curve is flattening with yields off their lows. The short-end up 1bp and longer-end down 1-2bp. Brent crude is down about half a percent but off its lows of the day. Metals have weakened throughout the day and are near session lows with gold slightly lower while other precious metals are down 1-2%. More big financials will report tomorrow, along with ASML. CPI will lead the economic data.